Part of its North American expansion plans, BMW has started to build a new plant in Mexico where it would produce the 3-Series sedan from 2019.

With this move, the German premium brand is following similar steps to other major carmakers that have lately revealed plans to build cars in Mexico. The trend has been evidently triggered by their intention to lower production costs, benefiting from the country’s affordable workforce and tariff-free entrance to the US market. BMW officially announced back in 2014 that it would invest 1 billion dollars in a car factory in the central Mexican state of San Luis Potosi, but it broke ground only last week. The new facility – with an annual capacity of up to 150,000 units – will make the brand’s best-selling model the 3-Series Sedan starting from 2019.

The company said the San Luis Potosi would balance out production at its Rosslyn factory in South Africa and it would also complement production in Spartanburg, South Carolina, which it will be further expanding this year in order to increase its pace and to achieve an output rate of 450,000 units. Spartanburg, which is specialized in BMW’s X models, became the largest in the Group’s production network in 2015. BMW has operated a local sales company in Mexico since 1994, which in 2015 delivered a total of 17,475 vehicles (12,170 BMWs, 5,305 Minis), an increase of more than 17 percent over the previous year.